Spare Change
Student-loan bill may help, but its future is uncertain

By Mike Caputo and Jamie Papapetros

College students in the United States, who often find a deep hole in their pockets because of the ever-rising debt that occurs as a result of paying off college loans, took a collective sigh of relief on Jan. 17 when the House of Representatives approved a bill to cut interest rates
on federally subsidized, need-based loans.

In 2005-2006, the average tuition and fees for private colleges and universities was $22,218, according to statistics released by the College Board, which was an increase of $344 from the previous academic year.

Princeton Campus SGA President Christian Stück is one of many students who have had to rethink their futures because of debt caused by paying off college.

“I am a bit concerned,” he said. “With my total debt accumulation at $65,000, it would be very difficult for me to repay my loans if my career objective was to become a full-time musician.”

So as tuition and fees continue to rise, the new Congress took an initiative during its “first 100 hours” campaign to acknowledge this financial burden that faces millions of students across the country.

But the question that still remains is whether or not the legislation passed by the House of Representatives, which still needs to go through Senate and the President for it to be fully approved, is going to actually help students currently enrolled in colleges and universities.

“They’ll debate it and it would not be a surprise if it’s pared down so that current college students are not likely to experience any immediate benefit,” said Dr. David Rebovich, a professor of political science at Rider and a political analyst who has been featured in many areas of the media.

According to Rebovich, freshmen entering Rider in future years may benefit from the bill. However, Rebovich didn’t express much optimism toward the bill even making it onto President George W. Bush’s desk. One major factor is that 60 Senate votes are needed for the piece of legislation to move forward, said Rebovich, which means the Democratic majority may not be enough.

The bill cuts the interest rates on subsidized student loans from 6.8 percent to 3.4 percent. Although interest rates will be cut in half, the decrease will be phased in, with the 3.4 percent expected to be set in place by 2011.

“I think it was a sincere proposal and one that demonstrates the party’s commitment not just to needy students but also to middle class college students,” said Rebovich. “And, frankly [on] political terms, often to show a contrast between priorities of this administration and the concerns of most American citizens.”

To fight the rising costs of tuition, Princeton University found a way to dive into its deep endowment funds and freeze its tuition for the 2007-2008 academic year, something that hasn’t happened at Princeton since 1967-1968.

At Rider, tuition increases every year, but since the academic year 2003-2004, which had a 7-percent boost in tuition, the yearly increases have either decreased or remained steady. During the 2006-2007 academic year, the tuition increase was 5.7 percent from 2005-2006.

Unfortunately for Rider, the University doesn’t have nearly the amount of endowed resources to work with as Ivy League institutions like Princeton do, but Lawrenceville SGA President Steve Klemchalk pointed out that any financial help counts toward helping future students.

“Rider was easily worth its value of cost to attend,” Klemchalk said. “I believe that students who graduate and current students should donate to Rider University no matter what the value, to improve the campus and help fund scholarships.”

For those who simply cannot rely on only student loans, legislation and the Bush administration have introduced plans to increase federal Pell Grants, which would benefit students with low-income backgrounds. On Jan. 31, the House proposed a bill that would increase maximum Pell Grants from the current rate $4,050 to $4,310. During the unveiling of the 2008 federal budget, Bush outlined a plan to raise Pell Grants up to a $5,400 maximum.

According to both Klemchalk and Stück, the funding for scholarships and grants appear to be of the highest concern. In fact, Stück said he feels that it is one of the major factors for prospective students in determining the college or university they want to attend.

“Westminster’s endowment is not as significant as our competitors’, thus financial aid is not as competitive,” said Stück. “This could potentially dissuade prospective students from enrolling, especially given the facilities needs on the Princeton campus.”

Stück is back in the prospective student pool — but this time he’s deciding upon which graduate school to attend. Unfortunately for Stück, economics, rather than other factors, appears to be on the top of his priority list.

“Because of my high undergraduate debt accumulation, I’m looking at graduate programs that offer the best financial aid, particularly programs with great Graduate Assistantship opportunities,” Stück said.